Agenda item

(i)           Final Annual Financial Report – Statement of Accounts

2011 -12

Members considered a report that presented a revised and final set of Accounts for 2011/12, which reflected the changes that had been made since the draft pre-audit accounts were presented to Audit and Governance Committee for review on 25 July 2012.

The following issues were raised:

·        Clarification was sought as to whether the increased frequency of meetings with accountants across all Directorates to prepare the Statement of Accounts  would have financial implications for the Council.  Members were informed that there should be no additional cost as, by carrying out more preparatory work, there should be greater accuracy and hence less time needed to address errors.

·        Clarification was sought as to whether there would be an increased cost to the Council for the appointment of the new external auditors (Mazars).  Members were informed that the new arrangements should be more efficient and result in significant savings.

·        Members asked about progress in ensuring that there was a consistent approach from all accountants when the accounts were prepared.  Officers stated that regular meetings were being held with the accountants to ensure a common approach.  Work was also taking place to see how the financial system could be better used.  When the move to West Offices took place all accountants would be working in the same area which would also be beneficial.

·        Clarification was sought as to the accounting in respect of ward budgets.  Officers stated that, as with other expenditure, the purchasing of goods and services should be in accordance with procurement procedures and the finance processes set up across the Council.

·        At the request of Members, details were given as to the arrangements that were in place when the Authority borrowed for capital purposes.  An update was also given on the situation in respect of surpluses i.e. reserves held on the Balance Sheet.

·        Members requested that in the Annual Financial Report – Statement of Accounts, Note 49 – Defined Benefit Pension Schemes, the first paragraph be reworded to ensure greater clarity.

·        Councillor Runciman sought clarification of the Annual Financial Report – Statement of Accounts, Note 1 Accounting Policies section XIV – Interests in Companies and Other Entities – York Business Development Ltd regarding Accounting Policies XIV - York Business Development Ltd. She asked whether CYC still had an interest.  Officers agreed to email this information to her following the meeting.¹

·        Referring to section XVII of Note 1 in the Annual Financial Report – Statement of Accounts, Members asked if account had been taken of the fact that a number of leases were due to come to an end in the next few years.  Confirmation was given that this had been taken into account.

·        In the Annual Financial Report – Statement of Accounts, Note 1 Accounting Policies section XIV Councillor Runciman sought clarification as to this year’s contribution from the Yorkshire Purchasing Organisation.  Officers agreed to email this information to her following the meeting¹.

·        Members requested that a training session be held on the Local Government Pension Scheme to enable them to gain a greater understanding as to how it worked².  Officers agreed to make the necessary arrangements.

·        In the Annual Financial Report – Statement of Accounts, Collection Fund, Members noted the position in respect of income from business rates and questioned if there had been a fall from previous years.  Officers confirmed that collection rates remained as high as previously.  Members also noted the changes in the regulations to occur in NNDR/Business Rates to come into effect next year.

·        In the Annual Financial Report – Statement of Accounts, Note 50 Contingent Liabilities, at the request of Members, details were given of the situation in respect of Municipal Mutual Insurance Ltd and the implications of a recent court ruling in relation to employers’ liability for occupational disease claims.

·        In the Annual Financial Report – Statement of Accounts Glossary, Members requested that the details in respect of the Monitoring Officer be updated.

·        Members requested that, when accounts were presented in future, every effort was made to ensure that correct grammar was used and that the type face and font size was easier to read.

Members expressed their appreciation of the work that Louise Branford-White and her colleagues had carried out to prepare the accounts.

(ii)           Annual Governance Report 2011/12

Members also considered a report that brought to their attention the Audit Commission’s Annual Governance Report.   The report asked Members to agree the Council’s response in the Letter of Representation and sought approval to changes to the 2011/12 Financial Statement.

The representative from the Audit Commission stated that this year’s audit process had gone smoothly and the quality of the accounts and the supporting work was of a higher standard than previously.  She paid tribute to the way in which the service accountants had responded to requests for information.

Members’ attention was drawn to the value for money conclusion on pages 12 and 13 of the report and to the Audit letter.  It was noted that documents referred to on page 6 of the Annual Governance Report had now been received and hence an unqualified opinion on the financial statements would be issued.

Some Members were concerned to note that schools’ balances had been reconciled on 23 March 2012 rather than 31 March 2012.  Officers stated that this situation had arisen because of the timing of the school Easter holidays and that there had been no material difference.  Members’ view was that, in the future, schools’ accounts should perhaps be reconciled on 31 March. 

Members sought assurances that the work that was planned on the valuation of assets would be completed within the proposed timescale.  Officers confirmed that a new fixed asset system would be in place and that this would assist in the process.

RESOLVED:       (i)      That the Final Annual Financial

Report – Statement of Accounts for 2011/12 be noted.

(iii)         That the Annual Governance Report

                                 be noted.

                                      (iii)     That the items identified as material

         misstatements on pages 6 and 7 of  the Annual Governance Report (errors adjusted by management) be noted and the 2011/12 Statement of Accounts be amended for those items.

(iv)     That the amended Annual Financial

Report – Statement of Accounts 2011/12 be approved for signature by the Chair in accordance with the Accounts and Audit Regulations 2003 (as amended)

(v)     That the letter of representation – Appendix 2 of the Audit Commission’s Annual Governance Report be approved.

                                      (vi)     That the anticipated receipt of an  

unqualified Audit Opinion to both the Statement of Accounts 2011/12 and the Council’s arrangements for securing economy, efficiency and effectiveness in its use of resources be noted.

(vii)    That the Draft Annual Audit Letter, which would be published on the Council’s and Audit Commission’s website at the conclusion of the audit, be noted.

REASONS:                   (i)      It is a statutory requirement that a

committee of the Council or Full Council approves the Statement of Accounts for 2011/12 by 30 September 2012.

(ii)      To ensure the proper consideration of the opinion and conclusions of the External Auditor in respect of the annual audit of accounts and review of the council’s arrangements for ensuring value for money.

                             (iii) – (v)      To ensure compliance with

International Auditing Standards and relevant legislative requirements.

(vi)     To ensure Members of the Audit and Governance Committee are aware of any matters arising from the annual audit of the Statement of Accounts.

(vii)    To ensure Members are aware of the contents of the Annual Audit Letter.